Sports sponsorship contracts traditionally focus on category exclusivity and entitlements while overlooking data sharing language. However, with the rapid evolution of data usage in the industry, incorporating data sharing rights and obligations in sponsorship contracts is essential to maximize benefits for sponsors and sports entities.
Sports sponsorship contracts are often based on templates provided by teams or leagues, since these entities generally have significant leverage in the marketplace. Typically, these templates lack data sharing provisions because the data being exchanged is the team or league’s data, so there is little incentive for the team or league to offer up these rights at the beginning of a negotiation. In turn, it is incumbent upon the sponsor to think strategically about what contractual language it believes is necessary to add to enhance its marketing strategies and increase the overall value of the sponsorship.
Considerations for Sponsors
Data sharing provisions help sponsors optimize the value of their sponsorships in several ways, including the following:
- Sponsors often negotiate access to fan data collected by teams and leagues during events to tailor media campaigns and measure their effectiveness. Throughout each media campaign, the parties can monitor and share key performance metrics, such as how fans interact with on-site activations and digital engagements during events.
- Analytics tools can refine and interpret the data, offering sponsors insights into fan behavior and preferences.
- Sponsors may negotiate exclusive access to certain data sets, providing a competitive edge in marketing and fan engagement strategies.
- Sponsors can utilize application programming interfaces for seamless data transmission to ensure real-time access to insights, which is crucial for timely decision-making.
Team and League Rights
Teams and leagues may consider the following data exchange rights and obligations in sports sponsorship contracts:
- Increasing the sponsorship fees by treating the data as an entitlement with a distinct monetary value
- Retaining all ownership rights in the data shared with the sponsor, ensuring they have ultimate control over its access and use
- Data privacy obligations, ensuring the sponsor complies with relevant data protection regulations, such as the California Consumer Privacy Act of 2018 and the EU General Data Protection Regulation, to safeguard any personal information being exchanged. Conversely, it is critical that the teams and leagues have privacy policies in place granting them consent to collect and share personal information, such as fan data.
- Data security obligations, requiring the sponsor to implement and maintain robust security protocols to protect the data from unauthorized access and disclosure
- Audit rights for the team or league to ensure that the sponsor is adhering to all contractual obligations with respect to its data access, use, security, and privacy obligations
- Negotiating separate and distinct data liability provisions in the event the sponsor breaches any of its data access, use, security, or privacy obligations
Despite the extra round of negotiations involved, sponsors should be sure to incorporate data sharing provisions into sports sponsorship contracts to help maximize the partnership's value